Opening Bell: 06.30.11

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As QE2 Sets Sail, Bond Rally Sinks (WSJ)
For the third consecutive session, Treasury investors on Wednesday balked at buying new bonds at a large government-debt auction, sending prices lower and yields higher. The yield on the benchmark 10-year note reached 3.11%, its highest since May 25. Yields on the 10-year note have risen every day this week, adding about 0.24 percentage point since Friday and sparking speculation that the bull run in the bond market may have passed its peak.

Greece to Vote on Austerity Details (WSJ)
Greece's parliament is expected to approve legislation implementing a crucial five-year austerity plan later Thursday, analysts said, one day after a closely fought parliamentary vote approved the overall outlines of the plan. A single roll-call vote on the implementing legislation is expected at around 1100 GMT, but with deputies also being allowed to express their support or dissent for individual articles in the legislation.

Institutions Pull Most From Prime Money Funds Since March 2010 on Greece (Bloomberg)
Institutions pulled out of U.S. prime money-market funds at the fastest pace in 15 months, shifting to funds that invest only in U.S. government-backed securities out of concern the European debt crisis would worsen.

Austerity Aside, E.U. Plans to Spend More (NYT)
With the European Union’s 27 nations facing years of austerity, and Greece nearly bankrupt, now might be a good time for the bloc to prepare to spend less. Instead, top E.U. officials went into battle Wednesday for an increase in spending under a seven-year funding plan worth about €1 trillion, or $1.4 trillion.

Moody's: may cut US state ratings if sovereign downgrade (Reuters)
Moody's on Wednesday warned it may downgrade the credit ratings of U.S. states and municipalities with strong credit links to the federal government in the event of a downgrade of U.S. sovereign ratings.

Chinese Largesse Supports Euro, But For How Long? (DJ Newswires via WSJ)
China's secretive financial dealings and the FX market's own opacity make exact figures for China's affinity for euro-denominated assets hard to come by. Yet analysts point to official data showing that Chinese U.S. Treasurys holdings have fallen by at least $300 billion recently. Analysis of flows by Bank of America-Merrill Lynch shows that monetary authorities have been net sellers of dollars over the past four weeks, translating them into euros.

SEC Civil Action Against Ex-Goldman Director ‘Postponed Indefinitely’ (Law Blog)
A civil action against a former Goldman Sachs Group Inc. director who allegedly gave Galleon hedge fund founder Raj Rajaratnam inside tips about the investment bank has been “postponed indefinitely,” according to a notice posted by the Securities and Exchange Commission.

Summers Joins Andreessen Horowitz (DealBook)
Late Wednesday, Andreessen Horowitz, the venture capital firm led by the entrepreneur Marc Andreessen, announced that Mr. Summers was joining the team as a part-time special adviser. The announcement comes just one week after Square added Mr. Summers to its board of directors.

I.D. Could Get IMF Chief Off Rape Hook (Fox)
Dominique Strauss-Kahn's lawyers could exploit a possible flaw in the identification procedure to get the former International Monetary Fund head off the hook for suspected rape, the French daily Liberation reported Thursday…She identified Strauss-Kahn in an identity parade the afternoon of May 15. But according to the disclosure form, the 32-year-old Guinean woman had already seen images of the silver-haired Frenchman twice beforehand.

Biography Gives Strauss-Kahn’s Allies a Forum (NYT)
Dominique Strauss-Kahn’s wife said she was “very worried” about the sexual-assault charges against her husband in New York, but predicted the couple would emerge from the ordeal “dignified and standing tall,” and with their marriage intact. The comments by the wife, Anne Sinclair, appear in a revised version of “Le Roman Vrai de Dominique Strauss-Kahn” (“The True Story of Dominique Strauss-Kahn”), which will be released in France on Thursday.

Justin Timberlake Takes Stake In Myspace (THR)
Justin Timberlake is taking a minority stake in MySpace after its acquisition by online advertising network Specific Media and will help the company develop its new strategy and creative direction. Under its new owner, which finalized an acquisition for $35 million on Wednesday, MySpace is expected to focus on music.

China Eases Tax Burden on Poor With Law Change (AP via NYT)
China's legislature approved a measure Thursday to ease the tax burden on the country's poor in the government's latest effort to defuse tension over surging inflation and a yawning wealth gap. The legislature raised the minimum income on which workers must pay taxes from 2,000 yuan ($300) to 3,500 yuan ($540) a month.

BofA, Goldman Among Banks Cutting Jobs (Bloomberg)
Bank of America, the biggest U.S. bank, cut about 60 positions in its equity-sales and trading division this month, said two people with knowledge of the decision. Goldman Sachs, the fifth-biggest U.S. bank by assets, plans to eliminate 230 jobs in New York starting in September, according to a filing the firm submitted to the state’s Department of Labor.

Does Candy Keep Kids From Getting Fat? (CBS)
For the study, published in Food & Nutrition Research, researchers at Louisiana State University tracked the health of more than 11,000 youngsters between the ages of two and 18 from 1999 to 2004. They found that children who ate sweets were 22 percent less likely to be overweight or obese than kids who shunned sweets. Adolescents? Those who ate candy were 26 percent less likely to be overweight or obese than their non-candy-eating counterparts. And that wasn't the only surprising finding. Researchers also found that the blood of candy-eating kids had lower levels of C-reactive protein. That's a marker of inflammation in the body and a risk factor for cardiovascular disease and other chronic illnesses.

Despite Fears, Owning Home Retains Allure, Poll Shows (NYT)
Nearly nine in 10 Americans say homeownership is an important part of the American dream, according to the latest New York Times/CBS News poll. And they are keen on making sure it stays that way, for themselves and everyone else.

Banker Pay Rules Create ‘Unlevel Playing Field’ (Bloomberg)
European banks are at a competitive disadvantage in employee compensation compared with their U.S. counterparts because of the different rules imposed by regulators, according to human-resources consultant Mercer. The “unlevel playing field” is caused by the different U.S. and Europe approaches to deferred bonuses, Mercer said in an e-mailed statement today.

SEC Pushes to Level Swaps Playing Field (WSJ)
U.S. securities regulators proposed rules Wednesday aimed at protecting investors in some of the complex financial instruments blamed for exacerbating the financial crisis. The proposals, issued unanimously by the Securities and Exchange Commission, would set standards for how dealers treat customers entering into "security-based" swap transactions, including certain types of credit-default swaps.

JPMorgan retains fee crown despite equity wobbles (Reuters)
JPMorgan extended its grip on the global investment banking fee pool in the first half, even as income from bond deals, one of its top businesses, slumped in the second quarter and pressure from rivals grew. The U.S. bank lost ground in key areas such as equity capital markets (ECM), with its haul of fees from listings slipping further in Europe and Asia after a decline in 2010, data from Thomson Reuters and Freeman Consulting showed.

Pay Up 19% For Finance Chiefs (NYP)
CFO pay varied widely, from less than $600,000 to more than $60 million. Five CFOs received more than $20 million in compensation. Growth in pay partly reflected the growing clout and multiple responsibilities of some finance chiefs, and moves by some companies to combine the function with others.

U.S. small business borrowing surges (Reuters)
The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to U.S. small businesses, rose 26 percent in May from a year earlier, PayNet said. The index is now at its highest since July 2008, two months before the collapse of Lehman Brothers and the near derailment of the world financial system.

Food Trucks Shooed From Midtown (NYT)
David Weber, president of the New York City Food Truck Association, which represents 24 vendors, said the police activity is a result of a May 24 ruling by Judge Geoffrey D. Wright in New York State Supreme Court. The decision reinforced a city Transportation Department regulation, believed to date from the 1950s, stating that no “vendor, hawker or huckster shall park a vehicle at a metered parking space” to offer “merchandise for sale from the vehicle.”

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